The downgrades come days after Big Oil posted its worst earnings in decades due to last year’s record crude-price drop. While the lower ratings won’t immediately affect companies’ access to credit or their cost of capital, it highlights the challenges faced by the industry as crude prices recover, especially concerning its approach to climate change.

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The industry has taken several steps to work through the energy transition but “we don’t see these strategies as providing material credit differentiation,” S&P said. Stricter regulation and shifting demand patterns “will contribute to a more difficult operating environment for fossil fuel producers and will likely augment the risk of stranded assets and significant asset writedowns.”

Brent crude futures, the international benchmark, have risen 17% this year amid rising optimism that the worst of Covid-19’s ravages are in the past and economic growth is poised to recover. But that wasn’t enough to sway S&P, which said its sees “greater expected volatility in hydrocarbon volatility.”

S&P cut Exxon’s long-term rating to AA- from AA with a negative outlook. Chevron was lowered to AA- from AA with a stable outlook. Conoco was reduced to A- from A with a stable outlook.

Exxon shares fell 2.5% to $49.84 at the close of trading in New York while Conoco and Chevron declined 1.7% and 0.5% respectively. West Texas Intermediate dropped 1.2% to $57.96 a barrel at 4:43 p.m. in New York.